March 12, 2015 // by MischlerMarCom // Debt Capital Market Commentary

• Investment Grade New Issue Re-Cap
• Bank Stress Tests – Shining Citi Upon a Hill
• IG Primary Market Talking Points. 3 Upsized Deals;QVC Steps Back
• Everything Syndicate & Secondary from today’s debt capital markets

Today saw 8 IG Corporate issuers tap the dollar DCM printing 13 tranches between them totaling $8.20b .  The SSA space saw 2 additional issuers print 2 single tranche deals totaling $4.75b bringing the all-in IG total to 10 issuers, 15 tranches and $12.95b .

On just the 8 th of 22 business days in March, we have now priced just over 72% of the midpoint syndicate forecast for the entire month or $91.50b vs. $125.60b.

We’ve also printed more than 21% above this week’s average syndicate volume projection or $37.47b vs. $30.80b .

Bank Stress Tests – Shining Citi Upon a Hill

In other very important news, Citigroup posted the cleanest stress-test passing results of all the top Wall Street Banks today.  Citigroup should be able to raise its dividend and return capital to shareholders just one year detached from failing the stress test resulting in a $0.01 dividend in 2014.  Citi’s dividend had been suspended two years prior to that. Citi Chairman Michael Corbat seemed on the hot seat last year but has really helped turn around the bank along with all its dedicated employees.  For those who have stuck it out with Team Citi thru thick and thin, be they employees or shareholders, they will now see the results of the tough climb out of the past and be rewarded for their labors. Citigroup has subsequently announced it plans to boost its quarterly dividend to 0.05 and is setting up for a $7.8b buyback.  When the going gets tough; the tough get going.

Congratulations to Team Citi and all the other U.S. banks that deserve a standing ovation throughout these past many years of public scrutiny and oversight.

Look out for the big U.S. banks – here they come folks!  Buy Corporate America people.

IG Primary Market Talking Points – 3 Increases and 1 Postponed Deal

• Omega Healthcare Investors Inc. bumped up its 12-year Senior Unsecured Notes deal to $700mm from $400mm.
• KKR Group Finance Co. III LLC upsized today’s tap of its 5.125% 2044 Notes to $500mm from $300mm.
• Cigna Corp. increased its new 10-year Senior Notes transaction to $900mm from $750mm.
• QVC Inc. announced that it has withdrawn a proposed tap of its $250mm 5.95% due 3/15/2043 Senior Notes issue in response to current market conditions.  The deal had IPTs in the +315-320 “area” but never saw guidance. QVC still intends to proceed with the redemption of its 7.375% Senior Secured Notes due 2020, which will be funded by cash on hand and funds borrowed under QVCs Senior Secured credit facility.
• The average spread compression across today’s 13 IG Corporate-only new issues was 22.98 bps from IPTs to the launch. 

The WTD and MTD Pace of IG Corporate-only New Issue Volume v. Syndicate Forecasts